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Widener Commonwealth Law School

Friday, February 28, 2020

Abraham & White on Rethinking the Development of Modern Tort Liability

Ken Abraham and Ted White have posted to SSRN Rethinking the Development of Tort Liability.  The abstract provides:

The standard story of the development of modern tort liability is straightforward, but it turns out to be seriously misleading. The story is that, in the second half of the nineteenth century, negligence liability replaced the pre-modern forms of action as the principal basis for the imposition of liability for accidental bodily injury and property. Suits for negligence began to be brought, and insurance against liability for negligence was introduced. The tort system, and the liability insurance system that had arisen to accompany it, were then quiescent for the next half-century. Around 1970 tort liability began to expand substantially. For several decades there have been contentions that at that point there was an “explosion” of tort liability.

The problem with this story is that it trades on a misleading caricature of what was occurring in the tort system before 1970. Tort law doctrine was indeed largely quiescent during the middle four or five decades of the twentieth century, just as the story suggests, until the well-known doctrinal expansions of 1965 to 1985 began. But tort liability was not quiescent at all. The magnitude of payments made to tort victims increased exponentially between 1920 and 1970 – by some measures, at a much greater rate than after 1970 -- and the magnitude of premiums paid for liability insurance increased in the same exponential manner. In addition, after liability insurance was introduced late in the nineteenth century, it did not simply become a behind-the-scenes source of financing for tort defendants, the way a passive guarantor stands behind a debtor. Rather, between 1920 and 1970, the courts confirmed, created, and extended liability insurers’ duty to defend their policyholders in tort suits and their duty to accept reasonable offers to settle tort suits against their policyholders. Liability insurers’ active performance of those duties created an unrecognized dynamic cycle that intensified the growth of tort liability, bringing it to the point where it stood in 1970. This Article rethinks the conventional story, by examining the important developments in tort liability and liability insurance that preceded the “explosion” of tort liability, and offers historical, political, and intellectual reasons why the misleading conventional story took root.

https://lawprofessors.typepad.com/tortsprof/2020/02/abraham-white-on-rethinking-the-development-of-modern-tort-liability.html

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